Apartment Pre-sale Outlook Index Rises by 2.4 Points in July
June 27 Real Estate Measures Underrepresented in Survey
"Attention Needed on the Impact of Lending Regulations on the Second Half Pre-sale Market"
The Housing Industry Research Institute has projected that the recent lending regulations announced on June 27, which include capping the maximum mortgage loan limit in the Seoul metropolitan area at 600 million won, could temporarily dampen demand for apartment purchases. The institute also forecast that the nationwide apartment pre-sale market will improve this month, but cautioned that the timing of the market survey did not reflect the most recent lending regulations, urging caution when assessing the housing market.
On July 8, the Housing Industry Research Institute announced that, based on a survey of housing developers, the nationwide average Apartment Pre-sale Outlook Index for July stood at 97.0, up 2.4 points from the previous month. The survey forming the basis of this index was conducted from June 19 to June 27.
This index, quantified on a scale from 0.0 to 200.0, is calculated by the Housing Industry Research Institute based on surveys of housing developers regarding the conditions of complexes that are about to be sold or are currently on the market. A reading above 100.0 indicates a positive outlook for pre-sales, while a reading below 100.0 indicates the opposite.
In the Seoul metropolitan area, the index for Seoul is projected to rise by 17.5 points from 103.7 to 121.2, and for Gyeonggi Province by 12.1 points from 100.0 to 112.1. In contrast, Incheon is expected to decline by 1.7 points from 110.0 to 108.3.
Outside the metropolitan area, Gangwon and Gyeongnam are expected to see significant increases of 24.2 points and 20.0 points, respectively. Jeonnam is projected to rise by 13.9 points, Jeonbuk by 12.5 points, Gwangju by 7.6 points, and Daegu by 5.2 points. In contrast, Sejong is expected to fall by 25.3 points, Ulsan by 22.4 points, and Daejeon by 16.7 points.
The institute stated, "The nationwide average Apartment Pre-sale Outlook Index rose by 2.4 points from the previous month, which appears to be due to heightened expectations for economic stimulus following the rapid formulation of a second supplementary budget by the Lee Jaemyung administration, as well as the continued reduction in mortgage loan interest rates."
The institute also noted, "As of May this year, there were 27,000 unsold homes after completion, marking the highest level since June 2013. Of these, 83% are concentrated in non-metropolitan areas, which is likely to have a particularly negative impact on the local pre-sale markets going forward."
In particular, the institute emphasized the need to monitor the impact of lending regulations on the pre-sale market. The institute stated, "With the implementation of the '6·27 Real Estate Measures' from June 28, a temporary contraction in buying sentiment and an increase in wait-and-see attitudes are expected. It is also important to pay attention to the impact that these tightened lending regulations may have on the apartment pre-sale market in the second half of this year."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
